HBR: Big Data for B2B May be Overhyped

23 Aug

A recent Harvard Business Review blog post provides a thoughtful analysis of one of the looming issues facing B2B marketers: how to think about Big Data. As the hype builds, marketers are looking closely at their CRM data (and data in other systems) to see how to best leverage it to drive revenue.

The post asserts that broad data analysis is overrated and that marketers should focus on the narrow set of insights that really matter in a B2B sales environment. Here is the guidance on B2B Insights:

“It’s impossible to know all the insight types that you can hope for, but it is imperative that you have several to bank on that can help sales force members answer key questions. For example, salespeople can gain insight into which customer to target, which offers maximize value for each customer, or how to spend time to drive success. Sales managers can gain insight into what guidance to give salespeople, how to set goals that are fair and realistic, and how to keep a team on course to achieve district goals. Sales leaders can gain insight into how many salespeople are needed, how to attract and retain top talent, and whether an incentive plan is motivating the right kinds of sales activity.”

B2B sales is always more complicated because the sales person has a relationship and often knows more about the prospect than the data can tell. The key to providing value to sales people is to help prioritize activity: helping them figure out who to call, what to focus on, and what activity to take next to maximize their chance of success.

The full post can be read here.

The Nurture Fallacy: 5 E-Nurture Marketing Myths

16 Aug

Marketing automation companies have built a big business by creating tools for electronic “nurture” programs. Now, B2B marketers around the world are executing “e-nurture” programs designed to take prospects on a multi-step journey designed to increase prospect education and awareness, and ultimately, to lead prospects to buy.

It’s not uncommon to see B2B marketers execute complex drip and trigger campaigns with seemingly endless tracks and branches. In some organizations, nurture complexity has outstripped the ability of charting tools to diagram the planned  communication paths.

While marketers must focus on the customer journey, the current e-nurture fad fails to deliver on the value that it promises. Here are the five commonly held beliefs that I believe to be myths:

Myth # 1: “You can take prospects on an email journey”

While email remains an invaluable tool for marketing and demand generation, it is a horrible tool for guiding prospects on a linear educational journey. Here’s why: only 10.8% of email is ever opened, and only 30% of mail that is opened is actually read (the rest is skimmed).

Most nurture campaigns are built on the assumption that a prospect will internalize a core message or idea and will progress on the electronic customer journey from message to message. The fact is that very little commercial email is read, very few ideas are internalized, and very few people are persuaded by content delivered through email. While some portion of people who open may click through and interact with online content, that proportion is almost always a small single digit percentage of the overall campaign audience. By the time the next message arrives, the educational benefits of the previous message are almost always forgotten.

Myth # 2: “Content should be sequenced along an educational path”

To maximize sales conversion, email campaigns should promote the best content (based on conversion rate) vs. optimizing content to follow a progressive educational path. Nurture campaigns should be focused on sequencing content based on effectiveness by first merchandising the content with the highest impact that hasn’t yet been accessed by a particular prospect. It’s common sense: sequencing content based on performance vs educational narrative will always drive better results.

Myth # 3: “The more tracks and steps, the better”

As marketers build teams and programs around nurture strategies, they often drift towards micro-segmentation of the prospect database based on interest and sales stage. The result is an endless tree of options and content as prospect interest evolves and sales stages change.

For marketing and sales, the typical result is painful complexity and a proliferation of content required to address every interest/stage permutation. In most companies, a few pieces of content do the real heavy lifting and have the biggest impact on persuasion and conversion. A proliferation of nurture segments dilutes the impact of the best content and creates heavy demands for new content that inevitably underperforms and quickly becomes out-of-date.

Myth # 4: “Prospect activity tracking is the secret to an effective nurture program “

Since only 10.8% of email is opened, a basic nurture practice is to resend messages to people who ignore the first message to try to get their attention a second, third, or fourth time. Continue reading

View Your Google Cookie: See What Google Knows About You

31 Jul

When it comes to advertising, personal data can be incredibly valuable. And when it comes to personal data, few organizations know more about you than Google.

As you browse the web, Google tracks the sites in its sprawling ad network that you visit. As Google tracks your browsing patterns, it builds a profile of your inferred interests and demographic categories which are then stored in your Google cookie.

Here is how Google explains it: “For example, if a user browses many sports-related websites displaying AdSense ads or watches sports-related videos on YouTube, Google may associate a sports interest category with their cookie and show the user more sports-related ads. Similarly, if the sites that a user visits have a majority of female visitors (based on aggregated survey data on site visitation), we may associate the user’s cookie with the “female” demographic category.”

My cookie was quite accurate: it included valid generic categories such as music, business news, consumer electronics, enterprise technology, CRM, Air Travel, andMobile / Wireless. It also knew my gender and age band.

If you want to see what Google knows about you, you can view the contents of your cookie here.

SMS: The Only Effective Digital Communication Channel?

26 Jul

In 2012, we’re living in an era of ignorable information.

According to a study by Mogreet, 88% of emails are never opened, 84% of Facebook news feed items aren’t viewed, and 71% of tweets are ignored. But there is one digital communication channel that almost always gets attention: SMS. An amazing 98% of SMS and MMS messages are opened and read by recipients.

Here are some other interesting statistics on SMS:

– There are 234 million mobile device users in the U.S. with access to SMS capabilities vs. 161 million Facebook users, 28 million Google+ users, and 18.7 million Pinterest users.

– 174 million Americans text daily. That’s 74% of people with mobile devices. In comparison, 91 million people use Facebook daily (57% of users) and just 2.8 million use Pinterest daily (15% of users).

– Every day, 6.4 billion text messages are sent in the U.S. During the same period of time, 3.2B Facebook “Likes” are awarded and 300M new Facebook photos are uploaded.

– While 58% of users login to Facebook daily and 57% of people check email fewer than 4 times per day, mobile phone users look at their phone an incredible average of 150 times per day. That’s roughly every 7 minutes during waking hours.

For marketers, the prominence of SMS shouldn’t be ignored. While the rules for sending SMS are very different than for other communication channels, SMS and other phone application notification methods are an increasingly important communication channel. While these statistics focus on SMS messages, other application-specific notifications are equally as effective at delivering messages and updates to mobile phone users.

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Do Great Consumer Products Market Themselves?

18 Jul

Spotify. Dropbox. Foursquare. Instagram. Facebook. Flipboard. Pinterest. Twitter.

Everyone knows these insanely popular companies even though they’ve invested almost nothing in advertising. In each case, they built a strong brand by building a great product or service and letting their customers spread the word.

With their success, a new generation of entrepreneurs are rethinking their approach to marketing. It’s increasingly common to hear luminaries talk about marketing as a weakness: the notion that only weak products require marketing.

So, is it true? Do great consumer products market themselves?

Here are a few thoughts:

  • Marketing isn’t advertising: Too often, I hear smart people talk about marketing as if it is only advertising. Advertising is just one way to build a business. There is so much more to marketing: product management, design of referral programs, visual identity, messaging, competitive analysis, collection of customer feedback and ideas, choosing new markets and segments to target, picking company / product / service names, building awareness through savvy PR and promotion, etc. While companies with great products may not need advertising, marketing often plays an important role in the rapid growth of product awareness and usage.
  • Very few products sell themselves: What almost all of the companies featured at the beginning of this post have in common is that they are free Internet services that appeal to a mass market population. While it takes real work to get people to try a free site, application, or service, the barriers to broad adoption are much lower. Products that almost never sell themselves include things that cost money, enterprise products of all types, and niche products that require more work to find first-time buyers and where it is harder to build the powerful cyclone of hype that benefitted almost all of the companies listed above.
  • Media attention matters: There are many companies that have built great products and still remained obscure. What makes the companies featured here special is that they have benefitted enormously from media attention. They all drove frenzied levels of media hype before they even had revenue. While some of this stems from great products and strong growth, much of it comes from thoughtful media strategy, direct press engagement, and charismatic founders who are trained to tell a powerful story.

 

So, if you have the right kind of great free product, what can marketing do to drive such insane levels of adoption?

Here are a few general principles for marketing a great consumer product:

  • Make sure the consumer experience is awesome: Create mechanisms to understand the user experience, to get constant feedback, and to solicit ideas so that the product keeps getting better and better.
  • Make sure your message is clear: Make sure that the messages about your company, your product or service, the problems that you solve, and the experience of being a customer are clear, consistent, and compelling. Make sure that everyone in your company can tell the same great story.
  • Keep customers coming back for more: Create the right experience for every customer to drive engagement, up sell to paid versions (if that is your model), and minimize churn and abandonment. Measure all of these things and look at the impact of every change on the metrics that matter.

Continue reading

Remarketing: How Online Ads Follow Your Every Move

28 Jun

Over the last decade, online display advertising has gradually become a little too relevant. It’s not uncommon to see ads for items that you have recently shopped for or sites that you have recently visited. Sometimes, these ads seem to stalk you, following you from website to website across the web as you browse, taunting you with images of specific items that you recently considered or decided to not to buy.

A few months ago, I came very close to purchasing a new desk from the web store of a national furniture chain. I placed the desk in my cart but after seeing tax and shipping decided not to complete the purchase. That’s when the marketers took over: ads for the item started appearing all over the web. I started receiving email reminders of my unfinished purchase. Two days later, I received a 15% off coupon that I could use on any item at their nearest store. I bought the desk and some other things that weren’t part of my original plan. Somehow, the marketers won.

These techniques aren’t exclusive to consumer marketing. Salesforce.com, for example, uses similar tactics to show ads to targeted enterprise prospects.

The key technique is “remarketing” — the process of showing targeted ads across multiple sites based on a prospect’s browsing or buying patterns.

How does remarketing work?

1. It starts with a cookie: When a sales prospect visits your site or clicks on an email, a single line of code drops a cookie to trigger the remarketing process. The marketer doesn’t need to know who you are or even have you in their database, they just need to drop a cookie and learn from your online behavior.

2. Consumers are segmented based on value: The cookie contains data to identify the type of prospect. If you add an item to your cart and abandon the purchase process, get ready to see lots of remarketing ads. Typically, marketers focus on categories of users and create remarketing paths that apply to thousands of users.

3. Marketers buy remarketing ads, clicks, or leads: Once the cookie is dropped, the advertiser can purchase ads on networks that span multiple sites. Either through a remarketing service or directly through the major ad networks themselves, the advertiser displays ads that are designed to lure the buyer back. The most sophisticated advertisers will feature the high-margin product that a prospect considered but abandoned. Ads can be purchased on Google or Bing or a number of remarketing-focused services.

Continue reading

The Tough Work of Building an Authentic Brand

20 Jun

Let’s start with the bad news: if you have a crappy product or service, you’ll never be able to build a great brand.

In the modern era of personal recommendation, community, and engagement, the best brands are built from authenticity. They derive from purpose. They build customer passion by delivering on commitments that matter. They are an extension of meaningful customer relationships. They are built on trust and shared values.

Building an authentic brand isn’t easy, but there is a roadmap:

1. Start with purpose: The best brands take shape deep within the organization. Before you can talk about your external brand, you need to articulate your purpose. What are you trying to accomplish as a company? What customer problem are you trying to solve? What are you going to do that really matters? Building consensus around purpose can be an explosive, difficult process. But once you find agreement, your purpose will become your most important organizing principle.

2. Make customer commitments: While your purpose is an internal compass, it drives the promises that you will make to your customers. Whether you have articulated them or not, all of your customer relationships are built on implicit and explicit customer commitments. In the same way that Apple customers expect beautiful functional design and Southwest Airline customers expect cheap and efficient air transportation, your customers will evaluate your brand based on their perception of the commitments that you make. There are no exceptions: strong brands are built on strong, consistent customer commitments. If your purpose is your internal reason for being, your customer commitments should be the foundation of your external identity.

3. Invest first in your customer experience: Here is the thing about purpose and commitment: you can’t fake it. If you are just positioning, your brand will fail. So if you have work to do to deliver on your purpose and customer commitments, do that work before you spend time and money on building your brand. A smart marketer once wrote, “If the brand is a promise you make, then the customer experience is the fulfillment of that promise.”

4. Think of your brand as an extension of the customer relationship: A brand, in its simplest form, is what people collectively say, think, and feel about your company, product, or service. It is the relationship that you form through customer experience but also engagement and conversation and community.

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Analysis: Just 28% of B2B Sales Compensation Pays for Selling

15 Jun

In the movie industry, smart investors measure how much of each dollar “hits the screen.” Money spent on the product — film production, actors, sets, and the like — has the potential to generate a return. Money spent off the screen on insurance, cars, administrative staff, paperwork, lawyers, accountants, security, and other back office functions typically doesn’t generate any return.

The same is clearly true for managing sales organizations. Sales compensation budgets, in particular, have the biggest impact on revenue and margin when the dollars  pay for selling. They have less of a direct impact when they pay for sales operations, sales administration, and sales time spent on non-selling activities.

So how much of every sales compensation dollar “hits the screen?” In a typical B2B sales organization the answer is: shockingly little. Based on my analysis, roughly 28% of sales compensation actually pays for selling. The rest pays for other peripheral activities.

What are the biggest syphons of sales resources?

(1) Non-Selling Time: According to a recent Accenture study, just 41% of sales rep time is spent on selling via the phone or face-to-face. 59% of sales time is spent doing other things. In particular, nearly a quarter of sales time is spent in meetings and on administrative tasks. The remainder of time is spent in training, account service, and account research.

(2) Sales Operations and Administration: It’s not uncommon to see sales support budgets of 20% or more. Sales support teams often handle everything from quoting to order-takign and fulfillment. In some large organizations, team manage go-to-market structure, sales compensation, sales training, and other sales related functions.

(3) Turnover and New Rep Training: According to the Accenture study, 25% of sales representatives changed jobs last year (11% left voluntarily, 14.8% were terminated). With a typical new representative hiring and ramp time of 6 months or more, at least 12.5% of sales compensation is spent on ramping new sales representatives to productivity.

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Categorizing Sales Prospects: Understanding Propensity & Engagement

12 Jun

As the sales process becomes digitally observable, smart sales and marketing organizations are developing sophisticated mechanisms to electronically score leads and prospects.

A typical business-to-business sales person manages 1,000 – 2,000 sales contacts. If they are lucky, they’ll also interact with hundreds of new leads each year. In sophisticated organizations, leads and prospects “travel” with electronic scores that help sales people prioritize outreach and focus on the highest value accounts. This scoring information is typically one dimensional: often a single score or categorization that captures demographics facts, project details, qualification information, and measures of engagement.

A much better approach is to evaluate and score prospects based on two discrete dimensions: propensity and engagement:

  • Propensity Scores: For any lead or prospect, a propensity score compares collected demographic information to that of other prospects to determine the probability of a purchase and potential opportunity value. If you sell hammers, a construction contracting company might be a high propensity target while a dry cleaner may not. By considering attributes such as industry, employee size, contact title, budget, revenue, headquarter country, company revenue, and company profitability, propensity scores qualify leads and prospects based on their fundamental attributes and statistical propensity to buy.
  • Engagement Scores: The problem with propensity scores is that they aren’t able to differentiate a cold lead that doesn’t know you exist from a prospect that has done their research and is ready to buy. Engagement scores, on the other hand, vary in real-time based on electronic measurement of prospect activity, increasing whenever a prospect takes an action that indicates interest in your products or services. A sophisticated engagement score might measure a prospect’s web visits to your site, calls to your office, participation in online communities, mentions of your company in social media, interaction with an electronic product demo, content downloads, online video consumption, and email communication. If they stop interacting, the score would automatically decline.

For most companies, propensity and engagement scores are discrete and mutually beneficial. A prospect that is high engagement / low propensity may be eager to talk but unlikely to buy. A prospect that is high propensity / low engagement will be hard to reach and unready to engage with sales. Propensity scores tend to be relatively static while engagement scores should be continually changing.

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